1991 vs 2013: Sonia-Singh duo fails to strike a chord with rivals

1991 vs 2013: Sonia-Singh duo fails to strike a chord with rivals as Narasimha Rao did 22 years ago

NEW DELHI: Bipartisanship â€” or cohesion among our political classes â€” made all the difference in 1991 â€” as opposed to now â€” with India staring at a faltering economy, say negotiators, bureaucrats and politicians who had worked towards overcoming balance of payments crisis of the 1990s.

"Call it formal or informal, but there was a great degree of bipartisanship in what was happening in 1991 when it came to decisive steps," says a person who had negotiated with the IMF and World Bank to get finance "at the shallowest" possible conditions. He asked not to be named. He says what was most remarkable then were the "back channels of communication" between the ruling side and the opposition.

Many others who had watched how the government had managed to take their rivals into confidence say RV Pandit, a publisher who was friends with people in high places in politics and business, carried "the messages from prime minister PV Narasimha Rao and then finance minister Manmohan Singh to BJP veterans AB Vajpayee and LK Advani and back".

Recalls NK Singh, ex-IAS officer: "There was total unity of purpose within the government. It was clear that India was in a deep balance of payments crisis and symmetric integrated action was required. Considering the different directions in which different ministries are continuing to pull the situation today is different than the government of 1991."

Singh, currently a JD(U) MP, confirms there were "vigorous backchannels" in which key opposition players were in the loop and consulted both about the unfolding crisis and the need for a decisive step.

Another bureaucrat who was close to the matter says that "the team work" was crucial. In 1991, says he, the team that "Dr Singh constituted" carried on for a long time, "ensuring continuity, domain knowledge and experience" to take on myriad of challenges. "This is not quite the case now. Not only there is no informal communication between the government and the opposition but also there is bickering within the UPA on how to handle the crisis," says he.

A senior Congress leader, who had worked closely with Rao and Singh in the 1990s, says "dismantling a team at the finance ministry to suit one's personal liking has taken us nowhere". He didn't elaborate though it was clear that the reference was to previous FM Pranab Mukherjee whose tenure saw the dismantling of what he calls a "team of experienced officials".

"In 1991 all of Rao's men were on the same page, be it Singh, P Chidambaram, Gopi Arora, Montek Ahluwalia, JS Baijal and others," says the Congress leader. Now, while the UPA has hit out at BJP leader Yashwant Sinha for not "cooperating" to fight a serious national crisis, Sinha lashed out at the Singh government for not convening a single meeting with the opposition to discuss the issue.

"Even a bipartisan support at this juncture will not help. Nothing will help except the resignation of this government and fresh election... The rupee is under attack and there are signs of a balance of payments crisis," he says.

CPM polit bureau member Sitaram Yechury shares Sinha's view. A BJP leader familiar with the negotiations of the 1990s says various departments of the Rao government stayed cohesive despite differences.

A former finance ministry official adds, "Dr Singh had, for instance, met the then petroleum minister with a proposal to divest a small portion of equity of one of the oil companies, which was necessary to meet the requirements of a large ADB-assisted loan." He goes on: "The minister, B Shankaranand, resisted because he said these were temples that had been built by Pandit Jawaharlal Nehru and Indira Gandhi. Their successor should not preside over committing such a sacrilege on what were described as temples of modern India."

However, "the economic compulsions of the moment were realised and the decisions were implemented", this official, who had negotiated with the likes of Michel Camdessus, then MD of IMF, for finances, told ET. He credits Chidambaram with "bringing in radical changes signalling that imports were not undesirable or unwelcome, lowering tariffs significantly, removing quantitative restrictions in a major way and committing for recalibrating the applied tariff to what successive finance ministers thereafter described as aligning tariffs with average Asian rates". He attacked the government for being unable to overcome resistance from trade unions and others in opening the coal sector.

Another government official quoted former US treasury secretary Larry Summers as saying that Indian leaders are busy reversing reforms initiated 22 years ago. Of course, says this official, there are global variables on which our leaders have no control over.

The Euro crisis is far from over. The US economy has gone through a terrible downturn after the financial crisis. "I think that it will be unfair not to recognise this even while holding the policy makers responsible for the current crisis," says he.

The official adds, "Thanks to our rulers rendering our economy uncompetitive, many industries, including the garment industry, an important source of exports, have relocated to Bangladesh." "They say we have come a long way since 1991. Have we really?" he asks.